M/S. Valencia Construction Pvt. Ltd vs Commissioner Of Central Excise, ...

[Arising out of Order-in- Appeal No. PVR/ 181/NGP/2013 dtd. 19/3/2013 passed by the Commissioner (Appeals) Central Excise & Customs, Nagpur]

For approval and signature:

Honble Mr Ramesh Nair, Member(Judicial)

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1. Whether Press Reporters may be allowed to see : No the Order for publication as per Rule 27 of the CESTAT (Procedure) Rules, 1982?

2. Whether it should be released under Rule 27 of the : CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not?

3. Whether Their Lordships wish to see the fair copy : seen of the Order?

4. Whether Order is to be circulated to the Departmental: Yes authorities? =======================================================

M/s. Valencia Construction Pvt. Ltd. : Appellants

VS

Commissioner of Central Excise, Customs & Service Tax, Nagpur. : Respondent

Appearance

Ms. Meetika Baghel, Advocate for the Appellants Shri. A.B. Kulgod, Asstt. Commissioner(A.R.) for the Respondent

CORAM:

Honble Mr. Ramesh Nair, Member (Judicial)

Date of hearing: 9/6/2015 Date of decision: 9/6/2015

ORDER NO.

Per : Ramesh Nair

This appeal is directed against Order-in- Appeal No. PVR/ 181/NGP/2013 dtd. 19/3/2013 passed by the Commissioner (Appeals) Central Excise & Customs, Nagpur, wherein Ld. Commissioner (Appeals) upheld the penalties and rejected the appeal of the appellant, it was filed only for waiver of penalties under Section 76, 77 and 78 of Finance Act, 1994.

2. The fact of the case is that the appellant is engaged in the repair and maintenance of roads and survey and map making services. On intelligence collected by the Department, it was found that appellant was not paying the service tax on said taxable service. Officers visited the premises of the appellant on 13/02/2010 and recovered some incriminating documents. On scrutiny of these documents, it was observed that appellant was not paying service tax on the service provided under the category of Survey And Map Making and Maintenance And Repair Services to the tune of Rs.15,88,251/- therefore show cause notice was issued and the same was adjudicated wherein demand of service was confirmed and penalty under Section 76, 77 and 78 was imposed. Aggrieved on the portion of the order which confirmed the penalties, appellant filed appeal before the Commissioner (Appeals), the appellant did not challenge the demand of service tax and payment therefore made by them prior to issuance of show cause notice. The Ld. Commissioner (Appeals) upheld the penalties imposed by the adjudicating authority by the impugned order; therefore the appellant is before me.

3. Ms. Meetika Baghel, Ld. Counsel for the appellant submits that service tax demand of Rs.9,35,451/- is on management, maintenance or repair of roads and demand of Rs.6,58,200/- is on survey and map making. She submits that both these amounts alongwith interest has been paid by the appellant before issuance of show cause notice, immediately on pointed out by the department. It is her submission that as regard the service tax of Rs.9,35,451/- on the repair and maintenance of road demand itself is not sustainable as in Finance Act, 2012 under Section 97, management, repair and maintenance of roads service has been exempted retrospectively for the period 16 June 2005  26 July 2009, however, since the appellant have not contested the tax liability before the Commissioner (Appeals) as well as before this Tribunal. She admits the demand, hence do not press for any refund. It is her submission that demand itself was not maintainable, penalty should not have been imposed. As regard survey and map making services, it is her submission that there is no suppression or malafide intention on the part of the appellant to evade payment of service tax for the reason that all the transaction have been recorded in their books of account and on pointed out by the department they have immediately paid service tax alongwith interest. In view of these facts the case of the appellant is squarely covered under Section 73(3) of Finance Act, 1994. According to which no show cause notice should have been issued and consequently no penalty should have been imposed. She placed reliance on this Tribunal judgment in the case of Patel Infrastructure Pvt. Ltd. Vs. Commr. of C. Ex. Rajkot [2014 (33) S.T.R. 701 (Tri. Ahmd)] wherein penalties related to the service of management of maintenance or repair of road has been set aside taking into consideration the retrospective amendment made by Section 97 by Finance Act, 2012.

4. On the other hand, Shri. A. B. Kulgod, Ld. Asstt. Commissioner (A.R.) reiterates the findings of the impugned order. He fairly submits that as regard penalty commensurate to the service tax on management maintenance or repair of roads demand itself is not maintainable in terms of Section 97 of Finance Act, 2012. However, since appellant has not contested confirmation of demand and payment thereof the same should not be disturbed. As regard penalty related to the service of survey and map making charges, he submits that appellant have not declared transaction in their returns and not complied with the procedure with the department, therefore it is a case of suppression, penalty rightly imposed by the adjudicating authority and upheld by the Ld. Commissioner (Appeals).

5. I have carefully considered the submissions made by both the sides and perused the record.

6. As regard penalty commensurate to the service tax of management, maintenance or repair of roads the service tax liability was not maintainable in view of the retrospective amendment made under Section 97 of the Finance Act, 2012. For this reason itself appellant is not liable for any penalty, therefore penalty under Section 76, 77 and 78 are dropped. As regard penalty related to service of survey and map making service, I found that there is force in the argument of Ld. Counsel that transaction were recorded in their books of account, therefore they had no intention to evade service tax. Moreover, immediately on pointed out by the department, payment of service tax alongwith interest was admittedly made by the appellant and there is no contest thereon, they have made out fit case for waiver of penalty under Section 73(3) which is extracted below:

(3) Where any service tax has not been levied or paid or has been short-levied or short-paid or erroneously refunded, the person chargeable with the service tax, or the person to whom such tax refund has erroneously been made, may pay the amount of such service tax, chargeable or erroneously refunded, on the basis of his own ascertainment thereof, or on the basis of tax ascertained by a Central Excise Officer before service of notice on him under sub-section (1) in respect of such service tax, and inform the 6[Central Excise Officer] of such payment in writing, who, on receipt of such information shall not serve any notice under sub-section (1) in respect of the amount so paid :

In view of the above Section 73(3), it is clear that either by the assessee or by the department service tax is ascertained and paid voluntarily without any contest and intimated to the department the department should not issue the show cause notice. When the show cause notice itself should not have been issued there is no question of imposing any penalty. In view of the above discussion, I set aside penalties imposed under Section 76, 77 and 78 however demand of Service tax on both the services confirmed by the lower authority and admittedly paid by the appellant is maintained. The impugned order is set aside, appeal is allowed.

(Operative part pronounced in court)

Ramesh Nair Member (Judicial)

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